Wall Street Loves These Stocks. Should You?

Analysts are unanimously bullish, but do you agree with these Wall Street darlings?

Despite all of Wall Street's conflict and contention, a fortunate few companies enjoy unanimous support among professional analysts. If the market's movers and shakers all believe these companies will beat the long-term averages, well, surely they will -- right?

Not so fast! With help from the 180,000 members of Motley Fool CAPS, we'll see whether these high-flying favorites deserve analysts' unwavering support.

Stock

CAPS Rating (out of 5)

CAPS Bullish Sentiment

No. Wall Street Analysts

52-Week Price Change

Teva Pharmaceutical(Nasdaq: TEVA)

*****

97%

27

(12%)

Windstream(Nasdaq: WIN)

***

95%

10

(3%)

Source: Motley Fool CAPS.

As you can see, there's a wide range of results, so just because Wall Street loves 'em doesn't mean you have to. Use the list as a jumping-off place for your own research.

No generic opportunityIt would seem the biggest lever of future growth Teva Pharmaceutical will lean heavily on is the vaunted patent cliff facing the pharmaceutical industry. Drugmakers Pfizer(NYSE: PFE) and Merck(NYSE: MRK) face a particularly steep drop-off, and their losses will be the gain of Teva and other generic drug outfits.

Generics already account for more than three-quarters of all prescriptions written today, and by 2015, blockbuster drugs with annual sales of $170 billion will go off patent. If you’re looking for a stock that will ride out the boom and bust of business cycles, Teva seems particularly well-suited to the task.

CAPS member talan123 likes the fact that Teva also has branded products of its own, and though that raises an ironic twist in that it will also face the loss of patent protection on drugs like Copaxone, it also means it has a diversified business line that can weather the ups and downs of volatility.

Tell us in the comments section below or on the Teva Pharmaceuticals CAPS page if you think the dual track program gives it a leg up on its rivals, and then add the stock to your watchlist to see how it eventually plays out.

Going for the winRural telecom provider Windstream found itself caught in a gale of higher overhead costs outpacing gains made in sales. But with 16% fewer customer connections across its voice, digital TV, and high-speed Internet access business lines, it looks like it will continue to swim against the tide.

As mobile communications grow, the importance of its landline business diminishes, even in rural areas. Rivals Frontier Communications(Nasdaq: FTR) and CenturyLink witnessed the same challenges of trying to emphasize higher-margin services like broadband Internet to their traditional landline customers. Windstream still saw a 27% drop in net high-speed Internet additions in the quarter.

Solid service and a plan for the future to move into VOIP and expand their cloud and broadband offerings. The biggest risk is in the continued erosion of landline home phone service (a big part of their cash flow), but replacement as indicated should more than offset that change.

Add Windstream to the Fool's free portfolio tracker to see whether it can connect to profits once again, and let us know in the comments section below or on the Windstream CAPS page when you think it will have the wind at its back.

Agree to disagreeTell us whether these stocks deserve to have Wall Street marching lockstep, but then check out The Motley Fool's new free report that highlights a company breaking all the rules on its way to huge, multibagger gains. The report is free, so get a copy today!

Author

Rich has been a Fool since 1998 and writing for the site since 2004. After 20 years of patrolling the mean streets of suburbia, he hung up his badge and gun to take up a pen full time.

Having made the streets safe for Truth, Justice and Krispy Kreme donuts, he now patrols the markets looking for companies he can lock up as long-term holdings in a portfolio. So follow me on Facebook and Twitter for the most important industry news in retail and consumer products and other great stories.